Judge Didn`t Report `Loan,` Witness Says

Economic interest statements filed by Cook County Circuit Judge John F. Hechinger, presiding judge of the Chancery Division, failed to list a $10,000 financial transaction with Michael J. Guinan, an attorney charged with income tax evasion, a federal jury was told Wednesday.

Roy Gulley, director of the administrative office of the Illinois courts, testified that Hechinger did not report the transaction on his economic interest statements filed under seal with the Illinois Supreme Court.

Guinan, who is charged with failing to pay taxes on $288,000 in income, has said he lent the judge $10,000 in $100 bills in 1975 and was repaid in $100 bills in 1979. Guinan, 50, says the repayment was nontaxable income in 1979.

Gulley said that all loans of more than $1,000 are required to be reported and that all real estate investments and transactions must be reported on annual financial disclosure statements.

But Hechinger`s attorneys, James Streicker and John Powers Crowley, contend that Guinan bought a half-interest in a tract on Marco Island, Fla., from Hechinger, who returned the money when the land was not developed.

In addition, the jury hearing Guinan`s tax fraud trial was told that Hechinger had been subpoenaed to testify about the transaction but had refused.

Outside of the jury`s presence, U.S. District Judge William Hart said Crowley had told the court that Hechinger would assert his 5th Amendment right against self-incrimination if called to testify about the transaction.

Hechinger refused to comment on his attorney`s statement that he would not testify.

Hechinger, a judge since 1966, is under investigation by the Internal Revenue Service and the U.S. Postal Service, and a federal grand jury has subpoenaed files of cases he handled.

Gulley also testified that the economic interest statements filed by the late Circuit Judge Raymond Berg did not list $18,000 that Guinan said he lent to Berg, $15,000 of which Guinan said was paid back in 1979.

Government prosecutors Joseph Duffy and Thomas Durkin declined to say whether they believed that the $10,000 transaction occurred between Guinan and Hechinger. But their financial analysis does not credit Guinan with receiving the $10,000 or the $15,000 in income in 1979.

Under their burden of proof, they are required to show why they have refused to credit the money as income for Guinan. Because Berg died in a July 4, 1979, boating accident and Hechinger refuses to testify, the government has only Guinan`s word, which they do not accept, that the money was paid back.

Guinan, who was arrested April 22 in San Diego after fleeing in December when his trial was scheduled to begin, is accused of using dozens of phony names and creating a web of bogus corporations to shuffle his cash income and hide it from the IRS.

Another government witness, Maria Trejo, a former secretary to Guinan, testified Wednesday that in 1982 Guinan told her to lie when called as a witness in his divorce suit. Trejo said Guinan wanted to be portrayed as a lawyer who made little money and rarely traveled.

Duffy and Durkin have presented evidence that Guinan regularly traveled in the Caribbean on his 37-foot boat.

Guinan`s second wife, Loretta Clarke Guinan, disappeared last November after she agreed to cooperate with the government.